International Journal of Mechanical Engineering and Technology (IJMET)

Volume 6, Issue 10, Oct 2015, pp. 48-54, Article ID: IJMET_06_10_006
Available online at
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ISSN Print: 0976-6340 and ISSN Online: 0976-6359
IAEME Publication

STUDY OF INDIAN VESSEL FLEET

GROWTH FROM 2003 TO 2012
H. Aravinth
Executive-Operations, Beta Shipping, Nigeria
Dr. J. Rengamani
Associate Professor, AMET Business School, AMET University
ABSTRACT
Shipping plays an important role in the transport sector of India's
economy. Approximately, 90 per cent of the country's trade by volume (70 per
cent in terms of value) is moved by sea. India has the largest merchant
shipping fleet among the developing countries and ranks 20th amongst the
countries with the largest cargo carrying fleet with 8.83 million GT and the
average of the fleet being 18 years. Indian maritime sector facilities not only
transportation of national and international cargo but also provides a variety
of other services such as cargo handling services, shipbuilding and ship
repairing, freight forwarding, lighthouse facilities and training of marine
personnel.
Key words: Ship Registration, IRS, Registry, Fleet, Neo Bulk.
Cite this Article: H. Aravinth and Dr. J. Rengamani, Study of Indian Vessel
Fleet Growth from 2003 to 2012, International Journal of Mechanical
Engineering and Technology, 6(10), 2015, pp. 48-54.
http://www.iaeme.com/currentissue.asp?JType=IJMET&VType=6&IType=10

1. INTRODUCTION
The Indian shipping Industry plays a crucial role in Indian economy. As 90% of the
Nations trade by volume is done via sea. India has been the largest merchant shipping
fleet among the developing nations. The Indian Shipping Industry supports
transportation of national and international cargoes and also provides various other
facilities such as ship building, ship repairing, lighthouse facilities, freight forwarding,
etc. Indian Shipping Industry with emergence of globalisation and liberalisation is
firmly ready to acquire new dimensions in terms of demand and infrastructural
development.
In order to sustain itself with the stiff competition posed by foreign companies, the
Indian industry is striving hard to bring about rapid transformation. Over the years the
way cargo traffic was handled has changed. Initially it was by the protected
environment by the tonnage committee who decided as to what type and size of ships

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H. Aravinth and Dr. J. Rengamani

the companies should be given a chance. Government subsidy vessels were only
assured for the Cargo was assured. Recently after a long period of decline, both
tonnage and fleet size have grown, with the addition of ships - tugs, survey vessels,
towing vessels as well as pilot vessels belonging to ports and maritime boards. During
April 2002 & March 2003 these were added. There are as many as 55 shipping
companies in the Industry, out of which 19 deal with coastal trade and 29 are engaged
in overseas trade. The rest operate in both types of trade.
The Indian Shipping industry is governed by 3 separate Acts such as The
Merchant Shipping Act in 1958, The Inland Vessels Act in 1917 & The Coasting
Vessels Act in 1838. Most of the vessels are registered under Merchant Shipping Act
and are dealt within the sector, smaller barges and coastal vessels are governed by the
other two Acts.
Historically Shipping industry has catered to only domestic shipping
requirements, while the private sector companies like Great Eastern Shipping
Company and Essar Shipping are increasingly getting involved in international cross
trade. Terms and in value terms, it is much lower to a meager 12% of India's total
overseas shipping bill of USD 5.0 billion. It is due to the negligible share of
shipowners in the Indian trade of high value goods like general cargo and containers.
The focus is on Indian trade and shipowners' share in the country's overseas trade is
hardly 30% in volume.
Shipping Industry is meaning not only just vessels and tonnage. Shipping
capabilities of any country are not solely measured in terms of the quantum of
tonnage under control. While in knowledge based economy, soft intangible
parameters like human capital, information technology and expertise are becoming
increasingly important for increasing innumerable opportunities. Today India has
become the source of quality seafarers to global shipowners. Indian shipping firms
normally rely on the inherent IT skills of Indians to play a pivotal role in IT activity
involved in international shipping and the country can come up with a business center
for information processing requirements of the international ship owners.
Usage of sea transport for the bulk cargo transport is the natural advantage of a
vast coastline of India. Due to the policy of liberalization, the Indian shipping
industry, major ports, as road ways have been given to the private sector. The
categories of ships are crude tanker, product tanker, bulk carriers, etc. All these are
brought under the Open General License (OGL) to facilitate acquisition at
competitive price.
For acquisition of such companies the Automatic approval is also available even
for the categories which are not covered under OGL i.e. barges, tugs and boats, etc.
Shipping companies have been given liberty to retain sale proceeds of their ships
abroad and utilize them for fresh acquisition.
Approval for Foreign direct investment up to 74% is also provided by the Time
Charter of ships by Indian Shipping Companies. 140 shipping companies were in
operation in India at the end of March 2003, with the Shipping Corporation of India
being the biggest in the country claiming a 42% share of the total Indian tonnage. The
country presently has 12 major ports, 184 other ports, nine shipyards and a coastline
of 7517 km.
Indian shipping Industry has become the 14th largest fleet in the world as per
deadweight tonnage. The shipping fleet of India consists of around 515 vessels with a
grt of 7.06 million and dwt of 11.5 million ones. It has about 616 ships, with a total
capacity of 6.62 million tons Gross Registered Tonnage (GRT). Out of which about
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Study of Indian Vessel Fleet Growth From 2003 To 2012

258 ships are engaged in overseas trade and the rest ply inland routes. Mercator linesIndia's third largest shipping Company.
When compared to World Shipping Tonnage the share of Indian Shipping
Tonnage as in term of tonnage (GT) by Flag of Registration stood at 1.19% on
1.1.2006, 1.1.2007 at 1.16% and 1.18% on 1.1.2008 as per data available.
There are immense opportunities which are needed to be grabbed by the shipping
companies of India. Liquefied natural gas (LNG) has to be imported to harness India's
power and fertilizer projects. This plan would involve huge volume of business for
shipping industry amounting to several billion dollars. The process would go up to the
expense of US$200 million for one ship to carry LNG. Therefore, an important step
for the Indian shipping companies would be to build strategic tie-ups with the foreign
counterparts.
In recent times the importance of Indian Navy in the high seas has never been felt
so much because of the ongoing piracy activities off the Somalian Coast. Indian
shipping industry contributed 8% of the entire world trade in terms of volume, which
was the contribution of nominal 1.3% in monetary terms. India and China were in the
same position 30 years ago, but today China has raced ahead in the field. Of the $30
billion freight market in India; only 8% of freight of Indian flagged ships is carried.
There is a lot of scope for growth in that area too.
The Ship which is registered in the IRS (Indian Register of Shipping) is called as
Indian fleet. This fleet follows the protocol of the IRS. The ship which is registered
under IRS gets some additional benefits when compared to other country registry. In
some cases some vessels register itself in open registry then it is called as Flag of
Convenience.

Objectives

To analyze the growth of Indian fleets.

To analyze the growth of Dry Cargo Bulk Carrier.

To analyze the growth of Oil Tanker Vessels

To analyze the growth of specialized offshore services.

Statement of the Problem

This study re-examines the growth of ship, which is registered in the IRS for period of
2003 to 2012. This talks about the growth and decline in the Indian Register of
Shipping. The following are the details for declining in Indian Register Vessels.

Difficulty in Financing New Ships.

Indias Low Credit Rating.

Time required for registering Mortgages.

Low operating efficiency.

Higher Insurance Costs.

Shortage of Efficient Labor.

Steep Tax Rates.

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H. Aravinth and Dr. J. Rengamani

Research Gap

The Investors feels that it takes a long term to get the return on their Investment.

The Credit provided by bank is too low when compared to other country Banks.
The Time Taken for the process of Registering is too long.
The Operating takes a lot time far more than any other country.
The tax rates are higher here.

2. RESEARCH METHODOLOGY
Research Design Exploratory Research
Data secondary data collected from various journals, magazines and from websites.
Analysis
Table 1
GROWTH OF INDIAN FLEET- Dry Cargo Bulk Carrier
No. Of Vessels
YEAR
Dry Cargo Bulk Carrier
1
2
2003
87
2004
91
2005
99
2006
97
2007
106
2008
106
2009
101
2010
104
2011
123
2012
128
Source: Transport Research Wing, M/o Road Transport & Highways.

No Of Bulk Cargo Carrier

140
123

120
100
80

87

91

99

97

106 106

128

101 104

No of
Bulk
Cargo
Carrier

60
40
20
0
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011

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Study of Indian Vessel Fleet Growth From 2003 To 2012

Table - 2
GROWTH OF INDIAN FLEET Oil Tanker
YEAR
1
2003
2004
2005

No ofOil Tanker @
2
115
126
130
135
139
137
140
154
159
139

2006
2007
2008
2009
2010
2011
2012

Source: Transport Research Wing, M/o Road Transport & Highways.

No.of Oil Tankers

180
160

154

140
120

126

130

135

139

137

159

140

139

115

100
No.of
Oil

80
60
40
20
0
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011

Table 3
GROWTH OF INDIAN FLEET Specialized Offshore Services

2006

Specialized
Offshore
Services
2
31
32
36
36

2007
2008
2009
2010
2011
2012

35
35
38
38
38
38

YEAR
1
2003
2004
2005

Source: Transport Research Wing, M/o Road Transport & Highways.

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H. Aravinth and Dr. J. Rengamani

No of Specialised Offshore Services

40
36

35
30

31

36

38
35

38

38

38

35

32

25
20

No of
Specialised
Offshore
Services

15
10
5
0
Year 2003 2004 2005 2006 2007 2008 2009 2010 2011

3. FINDINGS
In the year 2003 the Bulk cargo Carrier ships registered to IRS amounts to 87. In 2004
there was a growth with increase in four ships, which amounts to 91. In 2005 there
was doubling of previous ships and amounts to 99. In 2006 the registry reduced by 2
ships amount to 97. In 2007 the total number of ships registered was seen a growth
and registered 106 ships. In 2008 the registry remained same. In 2009 there was steep
decline in the registry, which resulted in 101 ships registry under IRS. In 2010 there
was a slight growth to 104 ships registered under IRS. In 2011 there was tremendous
growth, where there was 123 ships registered under IRS. In the consecutive year the
ship registry increased to 128.
In the year 2003 the Oil Tanker registered to IRS amounts to 115. In 2004 there
was a growth with increase in four ships, which amounts to 126. In 2005 there was
also increase of ships, which amounts to 130. In 2006 the registry increased by 5 ships
amount to 135. In 2007 the total number of ships registered was seen a growth and
registered 139 ships. In 2008 the registry faced declining in the registry, which
amounts to 137. In 2009 there was growth in the registry, which resulted in 140 ships
registry under IRS. In 2010 there was a slight growth to 154 ships registered under
IRS. In 2011 there was tremendous growth, where there was 159 ships registered
under IRS. In the consecutive year the ship registry remained the same to 159.
In the year 2003 the Specialized off shore Ships registered under the IRS amounts
to 31. In the 2004 there was a little growth, which amounts to 32. In 2005 and 2006
the growth remained same to 36. In 2007 there was decline in the growth, which
resulted in 35 ships registering under IRS. In 2008 the ship registry remained same. In
2009 there was a slight growth, which amounts to 38ships. In 2010, 2011 and 2012
the ship registered under the IRS remained same to 38 ships.

The 1st table and the chart describes that there is steady demand for the Bulk cargo
carrier ships.

The 2nd table and the chart portrays there is tremendous use of crude oil in the
country, which forecasts the increasing demand for the oil tanker.

The 3rd table and the chart portrays there is steady use of the specialized offshore
carriers.

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Study of Indian Vessel Fleet Growth From 2003 To 2012

4. SUGGESTIONS

The paper work for registering under Indian Register of Shipping can be
reduced.
The credit limit can be increased for the IRS Ships.
The tax levied on the ships can be minimized.
Financing can be called by selling shares.
The awareness should be created among the investors.
Preference to Indian Flagged Vessels can be given for berthing.
Indian Flagged vessels credit period can be extended when compared to foreign
flag vessels.

5. CONCLUSION
This research concludes that there is a huge potential for Indian Register of Shipping.
This potential can be utilized to increase the number of Indian Flagged Vessels. The
port office has been requested to give preference for Indian Register of Shipping
vessels.

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